Investing.com
Published Apr 04, 2024 14:30
Top markets for first-time home buyers offer affordable options and peers living nearby
First-time buyers made up half of all home buyers last year, according to Zillow's Consumer Housing Trends Report. That's the highest share in the report's history, which dates back to 2018, and up from a low of 37% in 2021. The "rate lock" effect ” occurring when homeowners are financially incentivized to keep their current home because of the low rate on their current mortgage ” has kept some would-be repeat buyers on the sidelines.
"Affording a home is a tough hill to climb, and it's especially steep for those buying their first home. Headwinds like mortgage rates, low inventory and rising rents are still strong, but easing," said Zillow Senior Economist Orphe Divounguy. "Attractive homes are moving fast, so those looking to buy this spring should get their finances in order now, including getting pre-approved for a home loan. The increase in new listings this spring, due both to new construction and to more homeowners choosing to sell, will give buyers more options and help to ease price growth. The housing train is slowing down just enough to give more first-time buyers an opportunity to hop on board."
Top 10 markets for first-time home buyers in 2024
Zillow's ranking of the best markets for first-time buyers is based on rent affordability, the share of for-sale listings a typical household can comfortably afford, how stiff the competition is expected to be for those affordable listings, and how many similar-age households1 live in the area.
The top two markets in Zillow's ranking,
First-time buyer tips and tricks
Zillow has gathered tools on one easy-to-navigate web page to help aspiring first-time buyers make the leap to homeownership, from getting finances in tip-top shape to hiring the right real estate agent who can help a buyer win a home.
Zillow's affordability calculator can help buyers understand their price range, including some of the hidden costs of homeownership that are often overlooked.
It's important for first-time buyers to understand how their credit score can impact their loan options and costs. A top loan officer can help a buyer understand all of their options, such as whether "paying points" or an adjustable rate mortgage might make sense for a buyer's specific financial situation.
Renters who pay their landlords through Zillow can now help build or enhance their credit history by opting in to rent payment reporting, with on-time payments reported to a major national credit bureau.
A down payment is often the biggest financial hurdle for a first-time buyer. Those without enough money saved for a 20% down payment shouldn't fret ” nearly half of buyers put down less than 20%. Zillow displays down payment assistance programs a buyer may be eligible for on all for-sale listings.
Metro Area | Rent | Share of | Affordable Listings Per | Share of Similar-Age |
19.9 % | 66.7 % | 3.4 | 26.0 % | |
21.5 % | 63.6 % | 4.0 | 24.3 % | |
19.8 % | 48.4 % | 2.5 | 28.1 % | |
22.0 % | 50.4 % | 2.6 | 28.9 % | |
20.3 % | 23.0 % | 1.3 | 33.6 % | |
21.9 % | 62.9 % | 3.7 | 24.4 % | |
22.6 % | 32.8 % | 2.6 | 30.6 % | |
22.4 % | 47.5 % | 4.2 | 25.3 % | |
21.0 % | 50.6 % | 2.2 | 27.2 % | |
22.2 % | 56.4 % | 2.3 | 27.1 % |
1 Ages 29“43. Zillow Research shows nearly half of first-time buyers are in this age range. |
Methodology
Zillow's 2024 list of the best markets for first-time buyers is based on four metrics:
About Zillow Group
Zillow Group (NASDAQ:ZG), Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in
Zillow Group's affiliates, subsidiaries and brands include Zillow ®, Zillow Premier Agent ®, Zillow Home Loans „ , Trulia ®, Out East ®, StreetEasy ®, HotPads ®, ShowingTime+ „ , Spruce ® and Follow Up Boss ®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a Zillow affiliate.
Written By: Investing.com
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